Massive chip shortage to continue for up to 2 years, says Intel CEO

Intel CEO Pat Gelsinger has said that the massive chip shortage will continue for at least two more years before the industry is able to completely catch up with the demand.

The strong demand environment continues to stress the supply chain across the world.

“While I expect the shortages to bottom out in the second half, it will take another one to two years before the industry is able to completely catch up with demand,” Gelsinger said during the Q2 earnings call on Thursday .

“IDM 2.0, which combines our internal manufacturing capacity with the use of third party foundries fast-positions us to weather these challenges and work with our ecosystem partners to build a more resilient supply chain,” he informed.

Intel laid out its IDM 2.0 strategy in March, moving the company forward toward its goal of delivering leadership products in every category in which it competes.

Intel reported a strong Q2 and raised full-year revenue guidance by $1 billion despite a highly constrained supply environment.

In the second quarter, the company generated $8.7 billion in cash from operations and paid dividends of $1.4 billion.

“Q2 revenue was $18.5 billion exceeding our guidance by $700 million. This upside was led by continued strength in our PC business and earlier-than-expected recovery in both our IoTG business and the enterprise portion of the data center segment,” said George Davis, Chief Financial Officer.

Gelsinger said that the ecosystem is back to shipping over one million PC units a day despite grappling with component shortages.

“I expect PC TAM growth will continue in 2022 and beyond, driven by three factors — PC density or PCs per household is increasing as COVID has irreversible changed the way we work, learn connect and care for each other,” he added.

The replacement cycles are shortening on a larger and agwing installed base, the shift to notebooks, the deployment of new operating systems and new better experiences, “such as our Evo platform will continue to drive refresh on the 400 million PCs over four-years old that are running Windows 10,” the Intel CEO noted.

Intel has created the Accelerated Computing Systems in Graphics group led by Raja Koduri to increase the company’s focus in key growth areas of high performance computing and graphics.